It’s a harsh certainty that a Ilkeston residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the loss of value being disguised by increases in the Ilkeston property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than 80 years - otherwise a higher premium will be due. The majority of flat owners in Ilkeston will be able to extend under the legislation; however a conveyancer will be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor for the duration of the formalities.
Leasehold residencies in Ilkeston with over 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Ilkeston lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Ibrahim was the the leasehold proprietor of a 2 bedroom flat in Ilkeston being marketed with a lease of just over 61 years remaining. Ibrahim on an informal basis approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Ibrahim to invoke his statutory right. Ibrahim procured expert advice and secured an acceptable resolution informally and sell the flat.
Last Winter we were contacted by Mr and Mrs. U Lefèvre , who acquired a ground floor apartment in Ilkeston in April 2006. The question was if we could approximate the price could be for a ninety year lease extension. Identical properties in Ilkeston with an extended lease were valued about £208,600. The mid-range amount of ground rent was £60 collected annually. The lease came to a finish on 20 March 2083. Having 57 years as a residual term we estimated the premium to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of expenses.
In 2009 we were contacted by Mr William Watson who, having acquired a basement flat in Ilkeston in November 2000. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Comparative residencies in Ilkeston with 100 year plus lease were valued around £200,000. The mid-range ground rent payable was £50 invoiced monthly. The lease elapsed in 2103. Taking into account 77 years outstanding we estimated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 plus legals.